Fred Foldvary: Underprivileged or Rights-Deprived?

Editorial

Underprivileged or Rights-Deprived?

by Fred E. Foldvary, Senior Editor

Poor folk are often labeled “underprivileged” and richer folk are called “privileged.” For example, there is a book titled “One Nation, Underprivileged: Why American Poverty Affects Us All.” But “privileged” and “underprivileged” are confused and misleading expressions. If you think the poor are “underprivileged,” then you don’t really understand poverty.

What is a “privilege”? The term originally meant “private law.” A privilege is a special advantage or prerogative or immunity or benefit given only to some people only because they have power or are favored by those with power. If everyone is entitled to something, like freedom of expression, or if everyone may obtain an item such as a passport with the same rules applying to all, then it is not a privilege but a right.

Whether a rich person is “privileged” depends on how he got the money. If he got a subsidy from the government, say for not growing corn, or protection from competition, then indeed that person is privileged. But if he got rich from working hard and investing well, then he is not privileged, because he earned the wealth. Working and investing are not privileges, but rights.

So if a person is poor, it is not because he is lacking in special protections, subsidies, and other privileges. A person is usually poor because he has been deprived of the natural right to work. Governments world-wide impose barriers between labor and productive resources, keeping some workers deprived of labor and others who do work deprived of their earnings from labor.

Taxes on wages create a wedge between the cost of labor to employers and the take-home pay of the worker. More costly labor results in less employment. Taxes on the income from capital goods and on the sale of goods has the same effect. There are unemployment taxes, disability taxes, and payroll taxes that increase the tax wedge. On top of that, there are minimum-wage laws that prevent the least productive workers from getting hired. There are permits, zoning, and other rules and costs that also prevent some workers from becoming self-employed.

Deprived of the full natural right to peaceful enterprise and labor, and the natural right to fully keep one’s earnings, the poor have little or no income, and depend on charity and governmental assistance. To call them “underprivileged” is a lie. The rights-deprived poor do not need privileges. They just need government to stop interfering with their right to work and save!

The biggest privilege world-wide is subsidies to landowners. Land values get pumped up from governmental services and goods such as streets, highways, bridges, mass transit, parks, local and national security, fire protection, and subsidies such as for schooling and water. Landowners are privileged to get land rent from tenants or the implicit geo-rent of their land, the extra value paid for by taxes on workers and enterprises.

There has been confusion about what is a right and what is a privilege. For example, driving a car is often called a privilege, for which one requires a license. Perhaps legally, driving is treated as a privilege, but actually, traveling is a natural right, and driving should legally be a conditional right, contingent on being a safe driver accountable for any damage.

Some consider a patent a privilege, but it too is a right. A patent would be a privilege if some lucky persons got patents because they have brown eyes while blue-eyed inventors don’t get patents. But if all persons have the same rules for getting patents, a patent ideally should be an application of contracts, a simple way of having a standard contract when selling an invention, where the buyer agrees not to copy the invention for commercial sales.

Some also consider a corporation to be a privilege, since the firm has a charter from a government. But limited liability applies also to some partnerships and to some non-corporate assets such as bonds. Moreover, it is a right rather than a privilege to operate a business, and a corporation should simply be a type of organizational structure with the technicality of treating the entity as a legal owner, as are trusts, cooperatives, associations, and other entities.

Real privileges are favors arbitrarily given to some groups and not others. Religions have privilege when their doctrines are enforced by law, imposed on those not holding those beliefs. For example, Christians are privileged when the law prohibits private enterprise on Sunday. Alcohol and tobacco producers and sellers are privileged when they can sell their products but competitors such as marijuana growers are prohibited. Farmers are privileged when they get protection from imported food. A real privilege favors one cultural, religious, or economic interest over another peaceful and honest practice.

The really underprivileged folks are all consumers, taxpayers and those who are restricted from peaceful and honest practices or have to pay extra to the government while others are unrestricted and non-taxed. These people lack privileges which others have. The proper remedy is not to expand privileges, but to eliminate all governmental privileges. That is why libertarians and geoists alike have the motto: “Equal rights for all; privileges for none!”

Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.What are your views? Share your opinion with The Progress Report!

We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.

2 Responses to Fred Foldvary: Underprivileged or Rights-Deprived?

“Poor folk are often labeled “underprivileged” and richer folk are called “privileged.” For example, there is a book titled “One Nation, Underprivileged: Why American Poverty Affects Us All.” But “privileged” and “underprivileged” are confused and misleading expressions. If you think the poor are “underprivileged,” then you don’t really understand poverty. ”

If there are two kinds of wealth, one being the fruits of one’s labor and the other being the natural wealth of natures bounty then there are such people as privledged and underprivledged.

Private ownership of land is a privledge, not a right and people who do not have the privledge of owning any land are properly labled underprivledged.

People who own land are rich and over privledged and people who do not own land are poor and underprivledged.

Advertise here.

Arts & Letters

Geonomics is …

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.

an answer to a rarely asked question. If price is a reward for production, why do we pay for land, never produced by any of us? What is land price a reward for? Good behavior? How much money do we spend on the nature we use? Who gets it? What do they do with it? (If you answer all these correctly, you’re not a genius but a geoist.) The worth of Earth is enough that were we to collect and share it, we could abolish taxes on the goods we do produce. For example, San Francisco’s Redefining Progress has calculated that Cali-fornia could abolish all state and local taxes were it to collect the values of resources and of using na-ture as a dump. By exorcising the profit motive from depletion and pollution, rent collection could replace bossy regulation. Economies could self-regulate, as the rest of the eco-system does. See how big problems yield to big answers when we ask the right questions?

a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.

about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.

a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.

one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.